Glimmer of hope as college tuition hikes slow

Costs at private colleges up 3.9% this year; average sticker price now at $38,589

Oct 9, 2012 @ 3:17 pm

By Liz Skinner

A little bit of good news for families set on sending their kids to private colleges: Tuition increases are slowing down.

Tuition and fees at private colleges and universities rose 3.9% for the current academic year, the lowest annual increase in at least 40 years, according to the National Association of Independent Colleges and Universities.

In each of the previous two school years, the increase was about 4.5%. The hikes averaged 5.7% a year from about 1998 through 2008, according to the group. “Private college leaders are listening, and working hard to keep students' out-of-pockets costs as low as possible and provide the best value for the tuition dollar,” said David Warren, president of the NAICU.

In addition to a number of schools' trimming tuition costs or freezing rate increases, some private colleges and universities are instituting programs to make themselves more attractive to value-oriented students and their parents. These include four-year graduation guarantees, three-year degree programs, joint bachelor's and master's programs, and degree partnerships with community colleges.

Schools also have boosted student aid. Student aid budgets at the 445 institutions that responded to the NAICU survey increased an average of 6.2% for the 2012-13 school year, the association said.

The 3.9% rate increase is the lowest on record, but it still tops the increase in the inflation rate. The Consumer Price Index rose 3% in 2011, according to the government. In 2010, the CPI increased a mere 1.5% in 2011, while the cost of college went up three times that amount.

Mr. Warren said average tuition hikes probably will always outstrip inflation.

“Not only in higher education, but other service industries where employees are highly trained, the expenses are going to be higher overall because of having to hire and retain those people,” he said. “That reality is built in, but institutions are trying to find ways at every turn to reduce the overall costs.”

According to The College Board, the published tuition and fees at private nonprofit four-year colleges and universities averaged $28,500 in 2011-12. That number jumps to $38,589 when room and board is added in.

The average net cost for full-time students at private colleges — the amount families pay after financial aid is awarded — is about $12,970 a year, however.

0
Comments

What do you think?

View comments

Recommended for you

Related stories

Featured video

INTV

Cameras roll at Best Places to Work for Financial Advisers' awards

Advisory firm winners on the top 50 InvestmentNews list of Best Places to Work for Financial Advisers explain the significance of this recognition at the Chicago awards event.

Latest news & opinion

Focus Financial files for an IPO valued at $100 million

The RIA aggregator, founded by CEO Ruediger 'Rudy' Adolf (above), has partnered with more than 50 registered investment adviser firms.

Piwowar defends SEC's best-interest rule

SEC commissioner says the Department of Labor rule set up an 'unworkable, impossible set of standards for people to comply with.'

RIA in a Box acquired by private equity firm Aquiline Capital

New owners plan more growth for the software service provider.

IBDs with the most female reps

Here are the 10 independent-broker dealers that have the most female reps.

Supreme Court decision likely to prevent brokers from filing class-action lawsuits

However, it likely won't bar employees from filing 401(k) lawsuits against their employers.

X

Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting investmentnews.com? It'll help us continue to serve you.

Yes, show me how to whitelist investmentnews.com

Ad blocker detected. Please whitelist us or give premium a try.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print